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)
UNITED STATES OF AMERICA, )
STATE OF NEW YORK, )
COMMONWEALTH OF PENNSYLVANIA, and ) Civil No.: 98 CV 7168 (FB)(MDG)
STATE OF FLORIDA, )
Plaintiffs, )
)
v. ) Filed: May 21, 1999
)
WASTE MANAGEMENT, INC., )
OCHO ACQUISITION CORP., and )
EASTERN ENVIRONMENTAL SERVICES, INC., )
)
Defendants. )
____________________________________________ )
The United States of America hereby certifies that it has complied with the provisions of
the Antitrust Procedures and Penalties Act (“APPA”), 15 U.S.C. §§ 16(b)-(h), and states:
1. The Complaint in this case was filed on November 17, 1998, and an Amended
Complaint was filed on December 1, 1998. The proposed Final Judgment (“Judgment”) and the
Hold Separate Stipulation and Order (“Hold Separate Order”) were filed on December 31, 1998.
Competitive Impact Statement were published in the Federal Register on February 26, 1999 (64
Fed. Reg. 9527). A copy of that Federal Register notice is attached as Exhibit 1.
3. Pursuant to 15 U.S.C. §16 (d), the United States furnished copies of the Amended
Complaint, Hold Separate Order, proposed Final Judgment and Competitive Impact Statement to
and the Competitive Impact Statement were published in The New York Times, a newspaper of
general circulation in New York, NY, and in The Washington Post, a newspaper of general
circulation in the District of Columbia. Copies of the certificates of publication from The New
Environmental Services, Inc., and Ocho Acquisition Corporation -- filed with the Court a joint
statement describing their communications with employees of the United States Department of
6. During the 60-day comment period after publication of notice in the Federal
Register, The New York Times and The Washington Post, the United States received five written
comments on the proposed settlement. These comments were from: (a) the Pulaski County,
Kentucky Solid Waste Management District; (b) the Environmental Committee of the Pocono
Pennsylvania Office of Solid Waste and Resource Management; (d) the Monroe County,
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7. The United States evaluated and responded to each of the comments it received.
The comments did not convince the United States that it should withdraw its consent to the
proposed settlement. The complete text of the comments and the responses appear in Exhibits 3-
The Pulaski County Solid Waste Management District complained that a combination of
Waste Management and Eastern would substantially eliminate competition in the collection and
disposal of the county’s residential waste. In our response, we point out that Pulaski County has
entered into a long-term contract for collection and disposal of its waste, which does not expire
until sometime in the year 2002. Under these circumstances, we note, it is highly unlikely that the
merger had eliminated any existing competition between the defendants in waste collection or
disposal services. In our view, it is simply too early to predict whether the merger would
eliminate any significant potential competition that may occur after the contract expires in 2002.
The Monroe County Municipal Solid Waste Authority and the Pocono Mountains
Chamber of Commerce, both based in Stroudsburg, PA, asserted that the governments should
have sought and obtained divestiture relief that would eliminate the anticompetitive effects of the
defendants’ merger in Monroe County, Pennsylvania. In that market, these commentators point
out, a combination of Waste Management and Eastern would control eighty percent or more of
the collection and disposal of the county’s municipal waste. In its response, the United States
pointed out that the proposed Final Judgment requires the defendants to divest the Waste
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miles from the major population center of Monroe County, and that the earlier Final Judgment in
United States v. USA Waste Services, Inc. and Waste Management, Inc., No. 1:98 CV 1616
(N.D. Ohio, filed July 17, 1998), requires Waste Management to divest commercial waste hauling
routes in the Allentown, PA area, which is only about 20 miles south of Monroe County. These
divestitures, once approved by the courts, would install in each of these areas one or more new
competitors whose operations would be sufficiently close to provide a serious competitive check
The Schuylkill County Office of Solid Waste and Resource Management (“OSWRM”),
based in Pottsville, PA, similarly complained that the governments should have sought and
obtained divestiture relief that would eliminate the anticompetitive effects of the merger in
Schuylkill County, PA. OSWRM alleged that the merger would leave Waste Management as the
In our response, we pointed out that the United States did not seek relief with respect to
commercial hauling in Schuylkill County because the amount of commerce was relatively small
(Eastern’s operations had less than $1 million in annual revenue), and Schuylkill County, like
Monroe County, is reasonably close to two areas in which divestitures mandated by the pending
Final Judgment and the consent decree in USA Waste case would establish independent
competitors fully capable of disciplining an exercise of market power by Waste Management after
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D. The RecycleWorlds Consulting Corp. Comment
RecycleWorlds, a private waste industry consultant, expressed concerned that the Final
Judgment would not halt the wave of mega-mergers currently sweeping through the nation’s
waste industry. In this rapidly consolidating industry, some markets, RecycleWorlds explained,
may become dominated by a handful of large integrated waste collection and disposal firms, and
more prone to collusive price increases by the few remaining competitors. To prevent Waste
Management from squeezing waste collection competitors by increasing the prices at landfills sites
at which they dispose their waste, RecycleWorlds would require Waste Management to divest its
waste collection operations or its waste disposal operations in any market in which it competes
with Eastern. Failing that, RecycleWorlds urged the government not to approve any asset
divestiture under the Judgment to any of the handful of major integrated waste firms, such as
Republic, Allied or BFI. These firms may be more inclined to cooperate with Waste Management
in rasing prices in some markets in order to avoid potential price wars with Waste Management
elsewhere.
In its response, the United States noted that it does not believe that requiring Waste
Management to divest all collection or disposal operations in any overlap market would be more
procompetitive than the divestitures ordered by the pending Judgment. Indeed, pursuing
RecycleWorlds’s alternative may result in Waste Management obtaining vast market power in
waste collection or in waste disposal services since, in effect, if Waste Management agrees to
divest one line of business it can obtain an overwhelming market share in the other line. As to
RecycleWorlds’s second point, the United States will not approve any proposed divestiture under
the Judgment that may substantially lessen competition in any market. To that end, the Antitrust
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Division recently rejected Waste Management’s proposal to divest these assets under the decree
to Allied Waste Services, Inc. Allied, the nation’s third largest waste industry firm, had agreed to
acquire Browning-Ferris Industries, Inc., the industry’s second firm. The pervasive competitive
overlaps between the Allied/BFI operations and the disposal and collection operations ordered
divested under the Judgment convinced the United States that the proposed divestiture would not
the Federal Register by May 29, 1999, a copy of the comments and the United States’s
responses.
9. With these steps having been taken, the parties have fulfilled their obligations
under the APPA. Pursuant to the Hold Separate Order that the Court entered on December 31,
1998, the Court may now enter the proposed Judgment, if it determines that the entry of the
Judgment is in the public interest. For the reasons set forth in the Competitive Impact Statement,
and in its responses to the public comments, the United States strongly believes that the Judgment
is in the public interest and that the Court therefore promptly should enter it.
______________/s/______________
Anthony E. Harris, Esquire (AH 5876)
U.S. Department of Justice
Antitrust Division
1401 H Street, NW, Suite 3000
Washington, DC 20530
(202) 307-6583